July Almanac, Vital Stats & Calendar: Often Best Month of Third Quarter By: Christopher Mistal & Jeffrey A. Hirsch | June 28, 2016 | Email | Print

 

July begins NASDAQ’s worst four months and is the third worst performing NASDAQ month since 1971, posting a 0.2% average gain. Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new funds. This creates a bullish beginning, a soft week after options expiration and strength towards the end.

 

July’s first trading day is the fourth best performing first trading day of all twelve months with DJIA gaining a cumulative 990.95 points since 1998. Over the past 21 years, DJIA’s first trading day of July has produced gains 81.0% of the time with an average gain of 0.50%. S&P 500 has advanced 85.7% of the time (average gain 0.46%). NASDAQ has been slightly weaker at 76.2% (0.27% average gain). No other day of the year exhibits this amount of across-the-board strength which makes a solid case for declaring the first trading day of July the most bullish day of the year over the past 21 years.

 

Trading on the day before and after the Independence Day holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and finish late. Since 1980, DJIA, S&P 500, and NASDAQ have recorded net losses on the day after. Russell 2000 is negative on the day before and the day after.

 

 

Election year Julys rank in the bottom half of all election year months. DJIA: 0.3%, 6th worst; S&P 0.2% 6th worst; NASDAQ (since 1972): -1.3% 2nd worst; Russell 2000 (since 1980): -0.9% 3rd worst.